News and analysis of critical issues in homeland security

July 26, 2014

I was mostly off-line this last week. Pretty much dawn to dusk I was part of a site visit with the US Coast Guard. I actually got out of meeting rooms and onto boats.

The purpose of the site visit was research-related. My role is as interviewer, writer, and project ethicist. The project has been going on for about three years. I have interviewed a lot of Coasties over this time. Over the last five days I talked to many more in a wide range of contexts, back to back, day after day.

When the project team met on Thursday night to start working the outbrief the Team Leader asked us to outline our top takeaways. Among my top five was, “The high level of intelligence, knowledge, experience, competence, self-criticism, openness, and passionate commitment that characterizes the force.”

Everyone else on the team enthusiastically agreed.

And we decided not to mention this in our outbrief. The Team Leader noted it would seem gratuitous. He was right.

This suggests something profoundly screwed-up in contemporary culture that even authentic appreciation is usually presumed to be self-interested and manipulative.

While I have generally been impressed with the US Coast Guard, until this week my exposure has been more senior officers and headquarters staff than anyone else. This week I talked to a lot more senior enlisted, ensigns, lieutenants, and Lt. Commanders.

Wow, wow, wow.

If you are a baby-boomer or older (like me) and worried about generational trends in the United States, a week with these folks will make you feel like a whiner and slacker. If you are an intellectual in search of informed, self-correcting, meaningful discussion of important topics, find a bar or lunchroom with Coasties in it. If you are an American worried about the future of the Republic, you will be much less worried after seeing and hearing a rising generation Coast Guard professionals engage their work.

Several times I have heard individual Coasties quote from memory selected lines from Alexander Hamilton’s instructions to the first complement from which the modern Coast Guard has emerged:

[An Officer] will always keep in mind that their countrymen are freemen, and, as such, are impatient of everything that bears the least mark of a domineering spirit. They will, therefore, refrain, with the most guarded circumspection, from whatever has the semblance of haughtiness, rudeness, or insult. If obstacles occur, they will remember that they are under the particular protection of the laws and that they can meet with nothing disagreeable in the execution of their duty which these will not severely reprehend. This reflection, and a regard to the good of the service, will prevent, at all times a spirit of irritation or resentment. They will endeavor to overcome difficulties, if any are experienced, by a cool and temperate perseverance in their duty–by address and moderation, rather than by vehemence or violence.

They know and live these words.

They are also reasonably skeptical of bleeding edge projects such as the one that brings me to them. But even here their skepticism is almost always affirmative. They are critical thinkers, not just critics. What most impresses me is how often they are personally and institutionally self-critical — brilliantly, honestly, and realistically — in front of each other and on-the-record. I am guessing this element of Coast Guard culture is crucial to other attitudes and behaviors observed.

The Latin from which appreciation is derived was a neutral term for assessing value. In both the original and modern meaning: I greatly appreciate the US Coast Guard.

Community involvement is, of course, a recurring mantra in the Strategic Plan and many other DHS policy, strategy, and operational documents. “Whole Community” is prominent in Mission 5: Ensuring Resilience to Disaster. Other missions include similar language. For example Mission 1: Preventing Terrorism and Enhancing Security has a goal to “Increase community participation in efforts to deter terrorists and other malicious actors and mitigate radicalization toward violence.”

A close reading of the Strategic Plan suggests the whole is made up of the following parts:

Individual
Family
Household
Neighborhood
Community
Private and Non-Profit Sectors
Faith Based organizations
Localities
States
Tribes
Federal Partners
Nation
All Segments of Society

Especially with those catch-all terms it’s not that my “absence” is excluded. But it is not given explicit attention. Certainly not priority.

What prominent place in the life of most Americans is not referenced?

The workplace.

Indirectly this is part of the private sector or non-profit-sector or local and state government or whatever other sector in which you work. But these “sectors” are abstractions. The workplace is a concrete — often literally glass, steel, and concrete — place. Yet the only time “workplace” is referenced in the Strategic Plan is with workplace standards for protecting intellectual property and “workplace wellness” programs for DHS employees.

According to the Bureau of Labor Statistics Americans age 25-to-54 spend an average of 8.8 hours per day at work. This is a larger block than any other activity, much larger than any other non-sleeping activity surveyed.

Yet the places where we work are not regularly conceived or engaged as venues where homeland security priorities can be pursued.

There are exceptions. I am aware of a few. I welcome you highlighting successful exceptions in the comments.

The absence of the workplace from the DHS Strategy reveals a strategic perspective. It is another example of the disconnect between private and public domains. Clearly government is a place where homeland security is to be practiced. There is considerable effort to engage neighborhoods and sometimes schools. These are real places too, but much more public than private in their character.

Is a “community” — whole or not — a real place? It depends, in my experience, on the community and how an outsider approaches the putative community.

There are offices, distribution centers, power plants, factories and refineries, restaurants, hotels, retail stores and many more real places where each day the vast majority of Americans spend the majority of their waking hours. Most of these places feature a task-oriented culture with management processes already in place. Most of these places are self-interested in a reasonable level of safety, continuity, and resilience.

In my personal experience most of these places are wonderful contexts for the practical practice of homeland security.

There is a tendency for modern strategic thinking to be more comfortable with space than place. See battlespace and cyberspace, even Space Command. I am often an advocate for differentiating between Theater Command and Incident Command and perceive we give too little attention to the Big Picture. But it is not, of course, one or the other: it is a continuum.

Real risks, threats, vulnerabilities and consequences usually unfold in real places where people come and go everyday.

Interesting what you can miss even when it’s right in front of you. I’ve read that strategy a half-dozen times. Wonder what else is hiding in plain sight?

July 11, 2013

One of my ongoing frustrations over the past few years, since the merger of the Homeland Security Council into the National Security Council in 2009, has been the decision of the White House not to publicly release – with some exceptions – the Presidential Policy Directives (PPD’s) issued by the President.

This is not an issue of classification or related security concerns – to the best of my knowledge, the relevant homeland security PPD’s discussed below are unclassified and have no control markings.

Steven Aftergood at the Federation for American Scientists has a webpage that is the best online repository of these PPD’s. As you can see on the list, six of them (2, 7, 8, 17, 18, 21) are on matters that are directly related to homeland security, but only two of these – PPD-8 on national preparedness and PPD-21 on critical infrastructure security and resilience – have been directly released by the Administration. One of them on the FAS site (PPD-2 on biological threats) is a watermarked leaked copy, apparently from DOD, and the other three are not publicly available.

The other three directives are nowhere to be found on the Internet.

PPD-7 is on the National Threat Advisory System, adopted in 2010 to replace the Homeland Security Advisory System. I received a copy of this one while I was working at the Senate after requesting it, and all it really does is set roles and responsibilities for the rollout of the new system. There’s no reason why it couldn’t be released publicly.

PPD-17 is on Countering Improvised Explosive Devices, and is apparently linked to this White House strategy on the topic released in February of this year. The predecessor directive to PPD-17 by the Bush Administration, HSPD-19, was publicly released in February 2007 on the White House website. Given the renewed attention to this issue in the wake of the Boston Marathon bombing, I would think that state and local law enforcement and emergency management agencies would benefit from a full understanding of current federal policy on this issue.

PPD-18 is on Maritime Security, and is referenced in a few places online, including a Coast Guard notice in the Federal Register, a US Navy document, a LinkedIn profile, and a (now deleted) job posting at SAIC, but the directive itself is nowhere to be found on the Internet. This directive replaces NSPD-41/HSPD-13, which was released publicly on the White House website in 2004, and DHS at the time released many of its supporting implementation plans (e.g. this one).

Given that the maritime domain is dominated by non-federal stakeholders – state and local governments, private sector entities, international partners – I do not understand why this directive has not been publicly released. Without its public release, key stakeholders are likely still assuming that NSPD-41/HSPD-13 is the top-level federal policy directive on maritime security issues, when in reality it was rescinded nearly a year ago.

Why this lack of transparency for a category of documents that had been publicly released in the previous administration? I suspect a primary cause of this is the integration of the Homeland Security Council (HSC) into the National Security Council (NSC) in 2009. The parts of the HSC that were absorbed into the new structure seem to have taken on the internal processes of the NSC, which has traditionally operated in the classified domain and worked on issues where federal agencies and international governments are the primary (if not sole) actors. However, for nearly all homeland security issues, the participation of non-federal stakeholders is essential.

It’s not serving anyone’s interests for these directives to be kept so close hold. Given the issues covered in these directives as well as the President’s stated commitment to government transparency, it’s overdue for these three PPD’s to be publicly released, and for the National Security Staff to become more transparent and forward-leaning in terms of releasing future PPD’s on homeland security-related issues.

February 21, 2013

We are all aboard the Carnival Triumph. That’s the cruise ship stranded at sea starting on February 10. Our comfort and survival rest on interdependent systems most do not understand; and some systems many actively avoid thinking about.

Usually the systems work well. But recently there has been a rash of cascading failures: Carnival Splendor, Costa Allegra, and Azamara Quest. The capsizing of the Costa Concordia is a different category, but not not irrelevant. In the wider world of cascading failures other labels are applied: Tohoku, Haiti, Lehman Brothers…

“We know that the fire originated in front of a generator,” Patrick Cuty, a senior marine investigator for the U.S. Coast Guard, told CNN on Sunday (February 17)…. It appears that the fire suppression worked as designed, Cuty said Friday (February 15). The engineer who was on watch around dawn February 10 saw the fire ignite over a video feed and immediately notified the bridge, Cuty said. Based on an inspection of the engine room Thursday, Cuty said the fire did not appear to have been large.

On Monday afternoon February 18, the Associated Press reported, “A Coast Guard official says the cause of the engine-room fire on the Carnival cruise ship Triumph was a leak in a fuel oil return line.”

The passengers had left the Port of Galveston in Texas on Thursday (February 7) for what was to be a four-day cruise to Cozumel, Mexico. They ended up sleeping for five days on sewage-soaked carpets and open decks, with food so limited that they were reduced to eating candy and ketchup on buns. “It’s like being locked in a Porta Potty for days,” said Peter Cass, a physician from Beaumont, Tex., as the ship crept closer to Mobile on Thursday. “We’ve lived through two hurricanes, and this is worse.”

I had hoped by now there might be more public detail on confirmed cause-and-effects. I can’t find what I consider fully credible information. But since I am just a blogger — and mostly want to argue an analogy — here’s a rough summary of what I understand:

A comparatively small fire — probably accidental in origin — was quickly extinguished.

But as a consequence water pumping, air conditioning, propulsion and ship stabilizers were all disabled. The Triumph was left “dead in the water.”

The crew was wonderful, according to many. Most of the passengers were cooperative, collaborative, and creative under stress.

But living conditions quickly turned from luxurious to life-threatening. The second of what will surely be many lawsuits, claims that passengers were “exposed to extremely toxic and debilitating conditions resulting in severe and permanent injuries.”

The response, both official and unofficial, was “effective”. No one died. The ship will cruise again.

Toxicity was mostly a matter of ongoing exposure to untreated human waste. With over 4200 humans in close quarters pitching this way and that, human hygiene was seriously challenged.

Water is often treated as yet another critical infrastructure. Water pumping, storage, distribution, and treatment systems are among our most ancient human infrastructures. But the water system is not just a contributing function, it is also a key supply: for hydration, fire suppression, and hygiene. We can survive with no electricity, without fuel, and — for a considerable period — even without food. But lack of water — or the persistent presence of wastewater — can very quickly overwhelm every other human capacity.

I almost headlined this post “Sh*t Happens”. I am still my mother’s child so I hide it in the final paragraph (raising a multitude of issues related to hypocrisy, passive-aggressive tendencies, and various pseudo-Freudian totems). But, indeed it does happen, both literally and figuratively, even as we pay our fare and blithely expect a three hour cruise.

The fuel crisis in New York City, Westchester County, Long Island, northern New Jersey, and nearby is important. Obviously it is important to the residents of these areas. Less obviously, it is important to those of us who are involved in homeland security policy and strategy.

In Sandy’s wake supply has not met demand. Not unreasonably, policy makers and strategists have viewed this as a lack of supply. Significant steps have been taken to increase supply. Senator Schumer pushed the US Coast Guard to reopen the ports of New York and New Jersey to fuel deliveries. Secretary Napolitano waived the Jones Act which allows foreign shipping to deliver fuel into the ports. President Obama ordered the military to deliver fuel into the hardest hit areas.

All of these steps have increased supply to the mid-Atlantic and served to suppress price increases. Many far removed from the New York metro area are benefiting from gasoline price reductions related to these steps to increase supply. It has been a vigorous response.

The fuel distribution terminals have been damaged and have not had electricity. South and east of Newark Airport and just west and north of Staten Island is a handful of places where pipelines and tankers deliver gasoline (Google Map). All of these venues lost power. None of these venues were on the utility’s priority restoration lists. The utility — and most policy-makers and strategists — did not know the role nor even the existence of these places. This is where tanker trucks pull into truck racks and gasoline is pumped from storage tanks and blended into tanker trucks which then proceed to various gas stations. There has been no electricity to operate the truck racks and that’s a fundamental problem. There are other problems with debris removal, personnel, damage to the storage tanks, and communications as to which gas stations have power, but these problems have not been the most serious impediments.

Two-thirds (or more) of gas stations have not had electricity to run their pumps and otherwise transact business. Many gas stations have plenty of gasoline, but do not have electricity to pump that gas. Why, you might ask, do gas stations not have back-up generators to pump their gas? This is required in Florida and, maybe (?), Louisiana. It has been successfully resisted in most other jurisdictions partly because it would further diminish the number of independent operators and enhance the market dominance of chains. Most gas stations would lose money on gasoline sales alone and make their (very small) profits on selling salty and sugary snacks, soda pop, beer, and cigarettes. The capital and personnel requirements for purchasing and safely maintaining a generator for conducting sustainable commerce — not just pumping gas — are significant especially for the smaller independent operator.

There are a range of policy and strategy options to address these fundamental problems. In the next two weeks is the right time for New Jersey, New York, Connecticut, and others to actively and inclusively consider these options.

It is also my impression — but I don’t have sufficient evidence to prove — that from Tuesday morning to Thursday afternoon/evening, these fundamentals were not being communicated to Governors Christie and Cuomo, Mayor Bloomberg, and other senior policy makers and strategists. As a result, considerable energy, time, and effort were being expended on measures that were peripheral to the current problem and may have distracted from resolving the truck rack problem identified above. This, too, is an issue worth considering while memories are fresh and more accurate after-action outcomes can be specified.

To be explicit: There is absolutely no evidence of anyone being negligent or passive (quite the contrary). There is evidence that a crisis, as usual, has exposed aspects of reality that now deserve sustained and thoughtful attention.

Some quick aggregation and analysis on three critical nodes. For this summary I have focused on the current situation in the Greater New York City area. This is not a region in which I specialize, I would welcome reader corrections.

By “current” I mean Thursday evening, November 1. This is the oft-referenced 72 hour mark since Sandy came ashore.

Power: 43 percent of New Jersey electric customers (1.7 million), over 1.5 million New Yorkers and close to 350,000 citizens of Connecticut are still in the dark. Several utilities report they expect to reach the 90 percent restoration point within the next ten days (November 9-12). See more details from the US Department of Energy. I have not found any reports of Sandy causing long-term impact on power generation. (There was a Sandy-related safety alert at the Oyster Creek Nuclear Power Station, but this operation had already shut down for scheduled maintenance before the superstorm hit.) According to the regional grid coordinator, even at the height of the storm there was “enough generation available in the region to cover the loss of those generating stations that are out of service because of the storm. “Transmission capacity, especially in New Jersey, was affected. There were 22 230-kilovolt transmission lines out of service because of flooding in substations in northern New Jersey. The storm compromised 41 transmission facilities in the multi state region most directly impacted by Sandy. But the storm’s biggest impact, as usual, was on the distribution system. In Westchester County alone over 600 roads remain closed because of downed power lines. Flooding has seriously impacted buried lines and substations in New York City and other coastal communities. According to reports in the Philadelphia Inquirer, “We had massive damage to our infrastructure,” said Chris Eck, a spokesman for Jersey Central Power & Light Co… The New Jersey utilities lost numerous substations to floods, in addition to losing power lines and pole-top transformers. The substations, which serve large areas of customers, must be drained, dried and cleaned before they can be reenergized. Ralph A. LaRossa, PSE&G’s president, said Thursday that cleanup crews were engaged in “hand-to-hand combat” with filth in substations, using toothbrushes and rags to remove dirt.”

Eleven years after the 9/11 terrorist attacks, Verizon Communications Inc. is once again scrambling to repair severe damage to a key switching facility inside its historic headquarters building in lower Manhattan. The massive facility for interconnecting key communications lines sustained heavy damage after planes struck the Twin Towers more than a decade ago. This time the enemy was water shoved ashore by Hurricane Sandy. The building is one of the worst hit of a number of facilities that carriers were rushing to fix Wednesday… Verizon employees said Monday night’s storm surge was so powerful that it breached the protective plugs that surround cables coming into the building. As a result, water flooded the critical basement “cable vault” that takes in communications cables and directs them to switching gear upstairs, which wasn’t damaged.

AT&T, Sprint, T-Mobile and smaller wireless carriers were also reporting tower outages and system instability across Metro New York and northern New Jersey. Wireless providers are not required to report on system status, but most expert observers seemed to agree roughly twenty-percent of the network is still non-operational across the most affected areas. The power outage is complicating and delaying restoration efforts.

Supply is not the problem. Identifying demand is not the problem. The network for delivering supply to demand has mostly — though not entirely — survived.

In all three cases the distribution system has been disrupted. In particular, transfer capability is a serious challenge for each sector. For example, fuel needs to be transferred from refineries, pipelines and barges and eventually into trucks. The Linden terminals play this function. The Verizon “cable vault” is analogous to the fuel terminals, as are electrical substations.

Our three heroes share a similar weakness. Is there a D’Artagnan to rescue them?

LATE FRIDAY UPDATE:

I’ve been offline, but (mostly) good news today in terms of gasoline distribution in the NYC metro area:

NuStar Energy said the truck-rack facility at its petroleum-products terminal in Linden, N.J., will be back in service by the end of day Friday. NuStar crews were able to bring a generator from one of its Gulf Coast facilities and procured another regionally to power up the truck-rack bays in Linden. The rest of NuStar’s 4.5-million-barrel capacity storage-and-distribution terminal in Linden remains shuttered until commercial power can be restored and damage assessments completed.

In an effort to reduce the impact of crippled fuel flows in the Northeast, U.S. Secretary of Homeland Security Janet Napolitano issued a temporary blanket waiver of the Jones Act on Friday. The move allows foreign oil tankers from the Gulf of Mexico to enter Northeastern ports to provide additional fuel resources, a service usually restricted to domestic vessels. About half of the region’s gasoline and diesel comes from the Gulf Coast via the Colonial Pipeline or via tanker from overseas.

Despite some continued disruptions to supply, other critical terminals and refineries continued to reopen on Friday.

Colonial Pipeline, the 825,000 bpd conduit that ships fuel from the Gulf Coast to the East Coast, said it had restarted a large section of Line 3, its Northeast mainline that runs from Greensboro, North Carolina, to Linden, New Jersey, on Thursday. It also resumed deliveries at its key Linden junction to a connected Buckeye terminal.

“While Colonial’s pipelines and facilities were spared significant damage, many of the terminals in the Linden area will require days if not weeks to fully recover,” it said.

Kinder Morgan said on Thursday it would resume shipping from its New York and New Jersey terminals in the next day or two, after the company brought in generators to power pumps and other equipment. The terminals in Carteret and Perth Amboy in New Jersey and in Staten Island, New York, will begin to receive and move refined fuels in the next 24 to 48 hours.

Royal Dutch Shell said Thursday that all its New York borough terminals were still down. Its Shell-branded network was 84 percent open in Connecticut, 47 percent open in New Jersey, 62 percent open in New York and 83 percent open in Pennsylvania.

Motiva Enterprises said on Wednesday it reopened more of the fuel terminals it shut because of Hurricane Sandy, but four terminals in Sewaren and Newark, New Jersey, and Brooklyn and Long Island, New York, have no restart date.

Magellan Midstream Partners, one of the largest U.S. pipeline and storage terminal companies, said it now has limited operational capacity to receive inbound vessels and barges at its New Haven terminal.

Buckeye Partners said its main New York Harbor area terminal in Linden, New Jersey, was reconnected to its power supply and fully operational by noon on Friday. The company expects its two other New York area terminals in Inwood and Long Island City to return to service by November 2 midnight. The company is supplying jet fuel to the three airports in the New York City area.

Based on today’s (November 2) emergency survey of gasoline availability, EIA estimates that two-thirds of gasoline stations in the New York metropolitan area do not have gasoline available for sale. This number includes stations that reported no gasoline available and those EIA could not reach after numerous attempts, and consequently assume that the station was closed. Of the stations sampled, one-third had gasoline available for sale, 3% were not selling gasoline because they had no power, 10% had power but no gasoline supplies, and 53% percent did not respond to attempts to contact them.

The Obama administration is ordering the purchase of up to 12 million gallons of unleaded fuel and up to 10 million gallons of diesel fuel for distribution in areas impacted by Superstorm Sandy to supplement private sector efforts. The Federal Emergency Management Agency said Friday that President Barack Obama has directed the Defense Logistics Agency to handle the purchase of the fuel. It will be transported by tanker trucks and distributed throughout New York, New Jersey and other communities impacted by the storm.

Governor Chris Christie took action to prevent a fuel shortage and ease the problem of extended wait times and lines at gas stations by signing Executive Order 108, declaring a limited state of energy emergency with regard to the supply of motor fuel and implementing odd-even rationing for gasoline purchases in 12 New Jersey counties. Odd-even fuel sales will take effect in the following counties at noon on November 3, 2012: Bergen, Essex, Hudson, Hunterdon, Middlesex, Morris, Monmouth, Passaic, Somerset, Sussex, Union, and Warren.

Tankers able to deliver almost 215,000 metric tons of gasoline are waiting outside New York Harbor to unload their cargoes after the worst Atlantic Coast storm in history shut terminals and halted refineries. Six vessels within a 100-mile radius of the port of New York have been waiting since at least Oct. 28, according to IHS Inc. vessel-tracking data compiled by Bloomberg News today. The tankers, also able to carry cargoes including diesel, are probably being delayed because of the storm and would normally load or unload within two days, according to Truls Dahl, a shipbroker at Astrup Fearnley A/S in Oslo.

The problem with consumer access to gasoline in the greater New York area is not the result of insufficient supply. Rather it is a lack of electricity at the fuel distribution centers in the Elizabeth (NJ) and Newark (NJ) seaports. According to Mr. Risalvato the electric utilities did not have these gasoline transfer hubs on their priority restoration lists until late on November 1. Since Friday morning there has been a sustained effort to restore power to these facilities and some generator power has been put in place. Mr. Risalvato also explain that even once electricity is restored, these facilities will not be operating at full capacity due to damage caused by storm surge.

The 16-million-barrel International-Matex Tank Terminals oil terminal in Bayonne, New Jersey has partially re-opened following power losses due to superstorm Sandy, its operator said on Saturday. The fuel terminal, the biggest in the New York Harbor, is still “coming back online,” said terminal manager Richard Fisette. As of Saturday, around half of the facilities at the site were back to normal operation and the major regional fuel repository was awaiting nominations, or orders to ship out fuel, from its customers, Fisette said. A pipeline serving the facility is operational and damage assessments at the site have not indicated fuel leakage from tanks or pipelines there, Fisette added. (The terminal operator has an especially informative website on the Bayonne facility available at: http://www.imtt.com/index.php?page=bayonne)

Based on today’s emergency survey of gasoline availability, EIA estimates that 38% of gas stations in the New York Metropolitan area do not have gasoline available for sale. This is a sharp decrease from 67% yesterday.

SUNDAY UPDATE

Reuters has a good overview. Some of their reporting on the underlying supply situation disagrees with my own analysis. Reuters is probably correct, the NYC region is not my expertise and fuel is on the very edge of anything that might be called expertise. Still, it’s worth double checking.

Hess, a major gasoline retailer in the NYC metro area, released details of the supply status at all of its points-of-sale, encouraging consumers to select locations with at least 7000 gallons in stock. This is a fascinating step: Please see http://hessexpress.com/FuelInformation

Late Sunday the Reuters leads with a new update (otherwise not much changed from above):

The New York Harbor energy network was returning to normal on Sunday with mainline power restored nearly a week after Hurricane Sandy pummeled the eastern seaboard. Yet damage to infrastructure near Linden, New Jersey, a major northeast fuel hub, kept a major refinery and some terminals shut, lending longer life to gasoline shortages that have persisted in the region. Another looming concern was that heating oil supplies were dwindling with temperatures expected to dip to freezing in New York by Monday.

In my judgment that’s just about right. In terms of gasoline, it will take a few days for deliveries to replenish retail locations — and increased assurance to diminish hoarding — but the strategic shift has been achieved with the restoration of power to the fuel distribution centers and the gasoline stations. I don’t know anything about heating oil.

This concludes the thread. If there are major new developments I will generate a new post.

Well, I lied. One more link: On Monday CNBC ran a report on the key role of the fuel terminals and raised some implications: http://video.cnbc.com/gallery/?video=3000127323&play=1

February 3, 2012

Although we can say with near certainty that new outbreaks of disease and catastrophic natural disasters will occur during the next several years, we cannot predict their timing, locations, causes, or severity. We assess the international community needs to improve surveillance, early warning, and response capabilities for these events, and, by doing so, will enhance its ability to respond to manmade disasters.

The intelligence chief’s comments regarding the Iranian threat were considerably more circumspect, “We assess Iran is keeping open the option to develop nuclear weapons, in part by developing various nuclear capabilities that better position it to produce such weapons, should it choose to do so. We do not know, however, if Iran will eventually decide to build nuclear weapons.”

Yet Senators, the media, and perhaps General Clapper himself gave much more attention to the possible Iranian threat than the probable threat of natural catastrophe and pandemic. The front page headline in the Washington Post was “U.S. spy agencies see new Iran risk.”

The same day the DNI was testifying on Capitol Hill, Mike Dunaway was making a presentation to a FEMA-hosted audience in Harrisburg, Pennsylvania. In late 2008 and early 2009 a reasonable sample of respondents answered a series of questions regarding their perceptions of relative threats to continuity of private sector operations, profitability or survival.

A couple of the survey findings stood out for me: Among 19 threats identified, the lowest perceived threat was “geologic disaster (earthquake, mudslide, volcanic action)”. The survey was conducted prior to the earthquake-and-tsunami in Japan and none of the respondents were in California. Perceptions will vary by time and place.

As addressed in two posts last Thursday and Friday, the President has signed-out a National Strategy for Global Supply Chain Security. I appreciate Alan Wolfe and Bill Cumming commenting here on the posts. Most friends, colleagues, and perhaps an adversary or two, decided to communicate more privately. Below are a sample of the comments received.

“Lots of cargo and logistics talk, not much recognition of how the supply chain is really something new and different.”

“Though better than the earlier draft, it still seems to be mostly focused on security and less on resilience. However, I know from direct experience it is not easy to write about resiliency, and perhaps being secure is one of the first parts of being resilient.”

“Stalking horse for new (costly) regulations.”

“While it is a national strategy, it feels quite federal/global to me. I’m not sure if many state and/or local folks could conceive how they could contribute to helping realize the goals outlined. It is my belief that a resilient supply chain, like many things, starts and ends in localities around the world.

“C-suites will ignore and deploy their minions to be sure “efficiency” always trumps “resilience,” no matter how inefficient it may be to have a catastrophic collapse of supply chains.”

“The private sector is paramount. It seems to me that much, though certainly not all, of the role of government will be to encourage, support, oversee and in some instances force the private sector to do things. Left to themselves, I think other forces will drive the private sector to not do some of what has to be done to reduce risk and enhance resiliency.”

“To give this the status of a presidential strategy is sort of amazing. It’s made me stop to think. But I feel a bit like a Catholic must feel when it’s announced the Pope has convened a major meeting on an aspect of doctrine I had really never thought of before.”

“What am I supposed to do? I don’t know enough about supply chains to even start a conversation with private sector peers. Besides which private sector peers? These are not the security and EM guys I usually work with.”

“(The strategy is) better than I would have bet. But while behind closed-doors the operators agree it is a real issue, how do you convince CEOs, CFOs, and Boards of Directors? Japan didn’t persuade. Thailand didn’t persuade. White House stationary is easy to ignore. The only things these masters-of-the-universe understand is a swift kick in you know where… and by then it will be too late.”

Perceptions will vary by time and place. But there is a strong tendency to give more attention to external threats than internal vulnerabilities. There is more concern regarding possible evil intent elsewhere than accident, neglect, and denial close at hand. We see the splinter in the eye of the other much more quickly than we recognize the log in our own eye.

Goal 1: Promote the Efficient and Secure Movement of Goods – The first goal of the Strategy is topromote the timely, efficient flow of legitimate commerce while protecting and securing the supply chain from exploitation, and reducing its vulnerability to disruption. To achieve this goal we will enhance the integrity of goods as they move through the global supply chain. We will also understand and resolve threats early in the process, and strengthen the security of physical infrastructures, conveyances and information assets, while seeking to maximize trade through modernizing supply chain infrastructures and processes.

Goal 2: Foster a Resilient Supply Chain – The second goal of the Strategy is to foster a global supply chain system that is prepared for, and can withstand, evolving threats and hazards and can recover rapidly from disruptions. To achieve this we will prioritize efforts to mitigate systemic vulnerabilities and refine plans to reconstitute the flow of commerce after disruptions.

In my judgment we are much closer to achieving “efficient and secure movement” than we are to a “resilient supply chain”. The new strategy could help with each, but the tougher task will be the effort “to mitigate systemic vulnerabilities.”

After a decade of streamlining their supply chains to make them less costly, the natural disasters and political upheavals that marked 2011 showed many multinational companies just how vulnerable those links have become.

A senior supply chain executive recently told me (clearly depending on me to protect his name and the name of his firm), “We have several known choke-points. I’m sure there are many more we don’t know about. It won’t take a major disaster to disrupt supply, just a couple of unusual, probably simultaneous accidents. I think — hope — there would be a similar impact on our competitors. But that doesn’t help our consumers.”

“There are ways to mitigate our risk, but they’re all expensive,” another executive explains. “And for the last decade and the foreseeable future the lower cost of US supply chain management has been our principal economic advantage. We’re much better than the Europeans, tons more efficient than the Chinese. Increase supply chain costs and we lose just about the only advantage the US has left on most commodity trading and even a broad range of high-end specialty goods.”

Again from the Wall Street Journal:

Justifying redundancies is one of the toughest aspects of managing a supply chain, because backstopping doesn’t pay off unless there is a disaster. When CFOs ask about the return on such investments, the answer is, “If we’re lucky, absolutely zero return,” says Sean Cumbie, vice president in charge of global supply-chain management at genetics-testing company Qiagen NV, based in Germany.

The new strategy makes a glancing reference to “appropriate redundancy” which, for most supply chain executives, is like discussing the practical difference between manslaughter and murder. Whatever you call it, the outcome ain’t pretty.

The senior supply chain guys (and a few gals) are the pioneers of the field. In the last twenty years they have transformed the known world. Not just the supply chain world, but the everyday world of billions of consumers. Today the supply chain is faster, cheaper, delivers much higher quality with much more assurance and transparency than a quarter century ago.

On most days the supply chain is also stronger, more flexible, and better at handling a range of emergencies and disasters.

But what we saw in Northeast Japan and Thailand has exposed a parallel reality. Like all networked systems, risk tends to pool in unexpected ways and often unexpected places. What if the earthquake-and-tsunami had hit the economic heartland of Tokyo and Osaka, instead of the Tohoku periphery? What’s would the outcome be if instead of Thai flooding it was an earthquake in San Francisco and down the east side of Santa Clara County? What happens if the Port of Long Beach is seriously disrupted for an extended period? What if cyber-vandals — or economic or national or terrorist adversaries –seriously target the digital systems on which the modern supply chain absolutely depends?

Supply chain and transport networks have continuously evolved to deliver capacity, speed, efficiency and customer service through organizational trends such as globalization, specialization, volume consolidation and information availability. The focus on cost optimization has highlighted the tension between cost elimination and network robustness – with the removal of traditional buffers such as safety stock and excess capacity. These developments have shifted risk distributions…(while) their effects have often included sharing risk more broadly around the world, reducing high-frequency risks and focusing risk within sectors, common technologies or nodes. Another common feature has been to disassociate risk from responsibility, misaligning incentives and creating moral hazards – the notion that a party that is insulated from risk will behave differently from how it would behave if it had full exposure to risk.

Most supply chain managers I know tend to discount low frequency, high consequence risks (see related post). They discount this kind of risk because over the last twenty years they have become true masters of risk management. They also discount high impact risks because their CEO’s, Boards of Directors, and shareholders reward them for squeezing every possible penny out of supply chain costs. They discount catastrophic risk because their creation — the modern supply chain — has never experienced a fundamental systemic failure.

Yet.

Many supply chain executives have become what economists sometimes call “risk preferers”, they have learned to maximize their return by skating with great style, grace, and confidence along the edge of chaos. Each day they become more adept at mastering the chaos. Is the experienced supply chain executive a sorcerer or sorcerer’s apprentice?

The new National Strategy is the starting point for a collaborative process of discussion, analysis, and policy development. It seeks to “develop a culture of mutual interest and shared responsibility” across government and the private sector. It’s the right goal. It’s the right way to pursue the goal.

The demise of Osama bin Laden and the capturing or killing of many other senior al-Qa?’ida leaders have rendered the group far less capable. However, al-Qa?’ida and its affiliates remain active in Pakistan, Afghanistan, Yemen, Somalia, and elsewhere. More broadly,violent extremists will continue to threaten U.S. interests, allies, partners, and the homeland.The primary loci of these threats are South Asia and the Middle East. With the diffusion of destructive technology, these extremists have the potential to pose catastrophic threats thatcould directly affect our security and prosperity. For the foreseeable future, the UnitedStates will continue to take an active approach to countering these threats by monitoring theactivities of non-state threats worldwide, working with allies and partners to establishcontrol over ungoverned territories, and directly striking the most dangerous groups and individuals when necessary.

Page 2:

In the Middle East, the Arab Awakening presents both strategic opportunities and challenges. Regime changes, as well as tensions within and among states under pressure toreform, introduce uncertainty for the future. But they also may result in governments that,over the long term, are more responsive to the legitimate aspirations of their people, and aremore stable and reliable partners of the United States.Our defense efforts in the Middle East will be aimed at countering violent extremists anddestabilizing threats, as well as upholding our commitment to allies and partner states.

Page 3:

To enable economic growth and commerce, America, working in conjunction with allies and partners around the world, will seek to protect freedom of access throughout the globalcommons ?– those areas beyond national jurisdiction that constitute the vital connective tissue of the international system. Global security and prosperity are increasingly dependent on the free flow of goods shipped by air or sea. State and non-state actors pose potential threats to access in the global commons, whether through opposition to existing norms orother anti-access approaches. Both state and non-state actors possess the capability and intent to conduct cyber espionage and, potentially, cyber attacks on the United States, with possible severe effects on both our military operations and our homeland. Growth in the number of space-faring nations is also leading to an increasingly congested and contested space environment, threatening safety and security. The United States will continue to lead global efforts with capable allies and partners to assure access to and use of the global commons, both by strengthening international norms of responsible behavior and by maintaining relevant and interoperable military capabilities.

Page 4:

Acting in concert with other means of national power, U.S. military forces must continue to hold al-Qa?’ida and its affiliates and adherents under constant pressure, wherever they may be. Achieving our core goal of disrupting, dismantling, and defeating al-Qa?’ida and preventing Afghanistan from everbeing a safe haven again will be central to this effort. As U.S. forces draw down in Afghanistan, our global counter terrorism efforts will become more widely distributedand will be characterized by a mix of direct action and security force assistance. Reflecting lessons learned of the past decade, we will continue to build and sustain tailored capabilities appropriate for counter terrorism and irregular warfare. We will also remain vigilant to threats posed by other designated terrorist organizations, such as Hezbollah.

Page 5:

Accordingly, DoD will continue to work with domestic and international allies and partners and invest in advanced capabilities to defend its networks, operational capability, and resiliency in cyberspace and space….

U.S. forces willcontinue to defend U.S. territory from direct attack by state and non-state actors. We willalso come to the assistance of domestic civil authorities in the event such defense fails or in case of natural disasters, potentially in response to a very significant or even catastrophic event. Homeland defense and support to civil authorities require strong,steady?–state force readiness, to include a robust missile defense capability. Threats to the homeland may be highest when U.S. forces are engaged in conflict with an adversary abroad.

Page 6:

The nation has frequently called upon its Armed Forces to respond to a range of situations that threaten the safety and well-being of its citizens and those of other countries. U.S. forces possess rapidly deployable capabilities, including airlift and sealift, surveillance, medical evacuation and care, and communications that can be invaluable in supplementing lead relief agencies, by extending aid to victims of natural or man-made disasters, both at home and abroad. DoD will continue to develop joint doctrine and military response options to prevent and, if necessary, respond to mass atrocities. U.S. forces will also remain capable of conducting non-combatant evacuation operations for American citizens overseas on an emergency basis.

You may see more. The document includes considerable attention to WMD and cyber threats not excerpted above.

May 31, 2011

I had an opportunity last week to travel on the nation’s largest ferry system.

The Washington State ferry system carries almost 23 million people per year. It is the third largest ferry system in the world. (I think British Columbia has the second largest system, and Sydney, Australia the first.)

June 25, 2010

Editorial note: Last evening John Comiskey posted the following as a comment to my Thursday post (immediately below this post). Without receiving his permission, I am moving John’s comment to today’s front page. If you have read John’s prior comments you know he serves with the NYPD and is also with the Coast Guard Reserve. John is currently deployed with the USCG to the Gulf of Mexico. Full disclosure, John and I both serve on the faculty of the new Pace University graduate program in management for public safety and homeland security professionals. We have met each other precisely once, at a Spring faculty meeting.

–+–

Your Grandpa sounds like a wonderful man. I imagine that he too would be overwhelmed and even frustrated by the levels of bureaucracy and particularly the federal government’s grant strategy (get the locals to do what you want by footing some or the entire bill). “All politics are local and most times federal too” might be the old “all politics are local.”

That being said, it sounds like your grandfather would have found a way. Bennet’s axiom “People are discouraged, encourage them,” should be a homeland security and preparedness mantra. The obvious — helping people — seems within our grasp, but eludes us all too often.

Homeland security and preparedness are a Pandora’s box of sorts (privacy intrusions, challenges to rights & privileges, economic costs, and others things that are not so nice). But, we need to remind ourselves that the original Pandora’s Box also offered hope.

Today, I heard a Coast Guard Commander refer to Deepwater Horizon as the Coast Guard’s Afghanistan.

The “long spill,” Deepwater Horizon, like the long wars in Afghanistan and Iraq require fortitude, patience, understanding, and hope. Somebody said “hope is not a plan.” Just the same I will keep on hoping and praying for the best whilst I prepare for the worst.

The emotional toll to Gulf residents, government workers, and cleanup volunteers warrants consideration and is bound to be high. The days ahead present three overarching challenges: stopping the spill, extracting the maximum amount of oil feasible, and mitigating the damage. The current forecast of 23+ storms with a 50% chance of a significant storm make that challenge all the more challenging –or might clean most of the mess up -mother nature is most resilient.

I have come to know some of the people of NOLA and have found them to be concerned but going about their business best they can. They talk a lot of football. LSU and the Saints are dear to their hearts. Last year’s super bowl celebration has continued with the team’s preseason visit to Louisiana communities weary of oil: http://www.npr.org/templates/story/story.php?storyId=127561660

If I remain in NOLA past September, I will likely attend a game. For the record I am a Jets fan. Football players and fans are resilient.

My new colleagues in NOLA poke fun at my New York accent. In turn, I enjoy their nawlins’ colloquialisms. They seem to appreciate my reviews of their restaurants and haunts. So far Acme Oyster House, Tujajues, and Café du Monde top the list. Nothing like football and food to bind people.

I have found that Katrina has left the people of NOLA with doubts in the efficacy of the federal government and particularly FEMA. NOLA’s celebrated relationship with the Coast Guard seems uneasy at best. I am told too little is being done too slowly. That phenomena might be a study in a relationship earned in one disaster (Katrina) only to be lost in another (DWH). Social capital is easier lost than earned.

The USCG is most resilient. It is and always has been a multi-mission organization. Today that mission is clear: ensure and facilitate the RP’s (responsible party) response – in this case BP. That mission will not make the Coast Guard popular.

From my view BP is doing all that it can and is most instances more than that. The American people need to know that without the media hype. BP too is resilient. I imagine someone or some people high in the organization deliberated as to their course of action –cut and run or invest in their enterprise. BP chose the latter. I can’t and won’t speak to BP’s alleged wrongdoing because I don’t know if they were negligent or had a catastrophic industrial accident. I know that matter is being investigated and await the final analysis.

February 3, 2009

Greetings from Munich. The conference here at the University of the Bundeswehr kicked off this week with a fitting representation of the challenges to global supply chain security from the perspectives of allied military and academic business. Michael Ritchie, Director, the USEUCOM Commander’s Interagency Engagement Group opened the conference with VADM Gallagher, Deputy Commander of EUCOM, Dr. Andreas Brieden, Dean of the School of Business, here at the Universität der Bundeswehr München, and Colonel Freitag, Head of the Military Department, at the Universität.

It seems as though IBM and CISCO are the only private sector companies participating in this symposium. Global supply chain security is a concern for military in terms of supply and logistics for their own operations, but also in terms of their obligation to possibly protect private sector supply chains as an attractive target by terrorists or other adversaries. The private sector already deals with numerous risks to our supply chains, which is one reason why IBM sought to be involved in this discussion. I’ll present on GMM this afternoon and my colleague Colm Leonard, Executive Program Manager, Import Compliance & Supply Chain Security, IBM, will present on a panel discussion to review solutions for greater supply chain visibility and security.

We heard yesterday from a number of experts. Most interesting was a presentation by the DHS attaché at the European Union. She is technically a CBP employee and gave a detailed run-down of C-TPAT, Secure Freight Initiative, Container Security Initiative, and other targeting measures to reduce risk in global supply chains in which the U.S. is a major link.

Her counterpart at the EU also presented and described a number of similar programs. Like C-TPAT, the EU grants special status to “Authorized Economic Operators.” Here in Europe, companies can provide greater transparency into their supply chains so that EU authorities can better identify risks to shared links in the global supply chain. The trust shared between the EU and these AEOs is similar to that which is extended between DHS and C-TPAT members.

Wouldn’t it be great if we could merge the membership? That is a goal, but the companies participating in C-TPAT or as AEOs remain concerned about the privacy protections for themselves if proprietary information about their supply chains – arguably major components in their competitive advantages – is shared with other governments that may favor domestic businesses.

Alas, we have a long way to go in this regard. But merely getting the stakeholders in the room is a valuable first step. I’ll post again later with an update on today’s exchange. The more interesting dimensions of this is a working group of which I’m a part. All symposium participants are broken into groups to dive deeper into such challenges as AEO/C-TPAT integration. In my group, I have the CISCO guy, another IBMer who deals with NATO, and military reps from Azerbaijan, Ukraine, Poland, Hungary, Czech Republic, and the U.S.

November 24, 2008

Today DHS announced a new regulation that requires maritime cargo carriers and importers to submit more data to Customs and Border Protection (CBP) about thier shipments. The goal is to better target risks in the maritime domain with inspections, added screening, security scanning, etc. The private sector must submit the additional information to CBP before vessels and their cargo are permitted to enter the U.S. Small businesses view this as a major setback for their competitiveness – and they have some backing on the Hill.

The Importer Security Filing and Additional Carrier Requirements requires that importers submit an Importer Security Filing (ISF) with the so-called “10+2” data set no later than 24 hours before the cargo is loaded onto a ship destined for the U.S.

Last month, The White House held a meeting with representatives from the private sector and relevant government agencies, including CBP, to discuss the proposed regulation. The meeting, which seems to have been hosted by the White House Office of Management and Budget, was entitled “”10+2″ Importer Security Filing and Additional Carrier Requirements” and took place on October 6. In attendance either by phone or in person were the following:

Congresswoman Valezquiez, Chairwoman of the Committee on Small Business, wrote a letter to OMB Director Jim Nussle explaining that CBP has failed to meet its obligations under the Regulatory Flexibility Act (“RegFlex”) to “properly analyze the economic impact of the 10 + 2 Rule on small entities.” RegFlex was enacted to limit disproportionate burdens on small businesses and entrepreneurs facing industry-wide regulations.

To accomplish this, RegFlex mandates that federal agencies conduct an analysis with a “description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.” CBP has stated that it “does not identify any significant alternatives to the proposed rule that specifically address small entities.”

To be fair, the interim final rule includes a delayed compliance date of one year after the interim final rule takes effect. If CBP perceives a “good faith effort and satisfactory progress toward compliance” among the noncompliant during the first year, CBP “will show restraint in enforcing the rule.”

According to Scott Gudes, Vice President, Government Relations, of the National Marine Manufacturers Association (NMMA), CBP will see a number of such cases because Small businesses, including small brokers, do not have:

1. The resources, i.e., customs experts, to help collect and compile the information being required

2. The 10+2 management system needed to allow their clients to collect 10+2 data from all involved parties

3. The integrated computer systems needed to process the information and communicate with suppliers abroad

CBP will conduct a review to determine any specific compliance difficulties that importers and shippers may experience in complying. Both the Congresswoman and the NMMA believe that the unintended consequences likely to be found include increased inventories, additional charges for dwell time, and costly infrastructure and IT system upgrades that larger firms can more easily absorb.

CBP’s review is intended to address just these types of impacts. It will examine compliance costs, the barriers to submitting the data 24 hours prior to lading, and the benefits of collecting the data. CBP states that “based upon the analysis, DHS will determine whether to eliminate, modify or maintain these requirements.”

The Importer Security Filing and Additional Carrier Requirements interim final rule will take effect 60 days from today.

October 24, 2008

DHS Customs and Border Protection plans to issue a new rule requiring U.S. importers and manufacturers to provide new data about U.S.-bound shipments. The data sharing procedure is designed to improve port security and prevent terrorist use of shipments and containers headed U.S. The proposed rule is part of the SAFE Port Act of 2006, in which CBP began requiring 12 new categories of data on shipments to the U.S. to be provided at least 24 hours before loading in foreign ports.

The Hill reports today that business groups oppose the rule, warning that it would “disrupt supply chains without improving security at a time when the U.S. economy is in the doldrums.” The National Association of Manufacturers (NAM) is been leading the effort to oppose, or at least modify, the proposed rule. NAM is joined by the U.S. Chamber of Commerce, the European-American Business Council, the Association of International Automobile Manufacturers, the American Petroleum Institute, and the Consumer Electronics Association.

DHS suggests the new rule could at first delay shipments by as much as 24 hours, and will eventually drop to 12 hours. Businesses, however, suggest that security would be actually reduced because cargo would sit unguarded while it awaited permission to be loaded and that today’s already fragile global economy can’t handle further strains like those they believe the new rule would impose. The new rule would prohibit a shipment from leaving its foreign port until DHS has the required data for each container. NAM argues that other hidden costs of compliance, longer delays in the supply chain, software needs, and added personnel for the new requirements would cost U.S. businesses about $20 billion a year.

These firms also argue it is more realistic to expect a two-to-five-day delay, depending on the complexity of the supply chain. As a compromise, opponents in the private sector are calling for a pilot program to be set up to test the new rule on a small scale first before full deployment.

While OMB and DHS are inundated with complaints from constituents in the manufacturing districts of Michigan and hard-hitting lobbying efforts by the U.S. Chamber of Commerce, a CBP spokeswoman told The Hill that OMB “is currently leading an interagency review of the rule, but would not comment on … why the agency wants to proceed without a pilot program.”